Tough times have employees placing greater reliance on benefits for financial security, as employers affirm their commitment to sponsoring those benefits albeit with increased cost sharing.
That’s one upshot from the 10th Annual MetLife Annual Study of Employee Benefits Trends released Monday. It found that since 2002 employer’s top benefits objectives -- controlling costs, attracting and retaining employees and increased productivity – have remained fairly constant. However, some delivery aspects have changed, such as the growth of auto-enrollment features in 401(k) plans. For advisers, the trends seem to point toward stable expenditures for core benefits, but greater funding from employees, including voluntary benefit purchases.
Nearly half of the 1,412 employees surveyed said that, because of the economy, they are counting on their employer to help them achieve financial security through employee benefits such as disability and life insurance and health.
For younger generations, that number is even higher. More than half (55%) of Gen X and two-thirds of Gen Y workers said economic pressures leave them counting on employers’ benefits program to help with their financial projection needs, according to the study, presented by MetLife’s National Medical Director Dr. Ron Leopold, an EBA Advisory Board member, at a MetLife Symposium in Washington.
Employers say they are hearing these concerns and rising to the challenge. Regardless of company size, of all companies surveyed, only 10% said they planned to reduce their benefits.
“The workplace has changed rather dramatically over the last decade since MetLife began doing its annual study,” says Anthony Nugent, executive vice president of MetLife. “Ten years ago, many Baby Boomers were planning to retire at age 65, Gen Y workers were just entering the workplace, and communication vehicles like Facebook and Twitter didn’t exist.”
As employees rely more on benefits, they are willing to bear most of the cost of them. Of surveyed Gen X and Gen Y employees, 62% said they are willing to bear more of the cost of their benefits rather than lose them.
And that may happen. While a third of employees believe their employer is likely to soon cut benefits, 70% of surveyed employers said they intend to maintain their current level of employee benefits. However, 30% will do this by shifting costs to employees. Some 57%, are interested in a wider array of voluntary benefits offered by their employer, as compared to 43% of Baby Boomers. The study also found that employers recognize this interest as 62% of employers agree that in the next five years employee-paid benefits will become a more important strategy than they are today.
With the ever-changing benefit landscape, loyalty continued to fall. Only half (42%) of employees feel a strong sense of loyalty to their employer, a seven-year low. Conversely, 59% of employers said they feel a very strong sense of loyalty to employees. One in three people would like to work for a different employer in 2012, but that number climbs to one in two for Gen Y employees.
Be sure to check back later this week for a Raw Bar podcast with what Leopold found most interesting in the study and in early April for an AdviserTV video on how the results apply to voluntary benefits.
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